Iwata says it is difficult to meet consumer expectations for packaged software, will focus on making games with greatest sales potential.

Software development is becoming increasingly difficult, according to Nintendo. President Satoru Iwata told investors as part of the company's latest earnings briefing that selling titles for $50-$60 has been a "challenge" for the Mario and Zelda developer.

"These days it is becoming increasingly challenging to determine the minimum development resources required for customer satisfaction. The point I am trying to get across is that currently it is more challenging to sell packaged software for around $50-$60," Iwata said.

To combat this difficulty, Iwata pointed to digital games in "other formats." Still, he acknowledged that satisfying customers with a $50-$60 product has been no easy task, and breaking even requires millions of units to be sold across the world.

"It is true that it is becoming increasingly challenging to meet the expectations of consumers who are willing to pay $50-$60 for a game, and it is difficult to break even unless a huge number of units is sold all over the world, so it cannot be denied that software development is becoming more challenging," Iwata said.

A silver lining, Iwata explained, is that such games have a higher sales potential than ever before, thanks to the growing gamer userbase.

"Among such packaged software, however, the sales of popular games are much larger than in the past. Therefore, if we create more hit games, the software development business can still be very profitable," he said. "All games break even if they sell millions of copies worldwide, so we will continue to do our best to develop games which have high sales potential."